Ross,Molly,and Dave had opened a partnership firm.Dave mortgaged his interest in the partnership in return for a $10,000 loan from the bank.Under this circumstance,which of the following will hold true as per the Revised Uniform Partnership Act RUPA)?
A)It would cause dissolution of partnership.
B)It would entitle the bank to access the firm's information.
C)The bank would be entitled to participate in running the firm.
D)The bank would be entitled to receive whatever profits Dave would have received.
E)The bank would be entitled to inspect the books of accounts of the partnership firm.

Question

Quizplus · Accepted Answer

According to RUPA, the mortgage of a partner's interest does not cause the dissolution of the partnership, nor does it entitle the mortgagee (bank) to participate in the management of the firm or to access the firm's books and information. However, it entitles the bank to receive whatever profits the mortgagor (Dave) would have received, up to the amount of the loan. Therefore, choice D is correct.

Ross,Molly,and Dave Had Opened a Partnership Firm